salvation through inflation the economics of social credit phần 10 docx

268 SALVATION THROUGH INFLATION books. All they publish are little pamphlets and an occasional newsletter With nothing but pamphlets and newsletters, they cannot recruit those well-educated people and professionals who are vital for leadership in a serious economic reform move- ment. But several of you have come to the general public in the name of Jesus Christ. I regarded it as my God-given assignment to reply in His name. Because I could do it, I did do it. Let me review at this point exactly what I have done. What I Have Done in This Book I have set forth a challenge to the “laymen” in your tiny movementi those who occasionally may read but do not write unsigned articles in your low-circulation newsletters. First and foremost, I have challenged them to think through what Major Douglas actually wrote - not what leaders of the Social credit movement would like for him to have written, or what you say that he wrote, but what he really did write. This is why my book is so long: I have filled it with verbatim quotations fi-om Major Douglas’ books. I have proven from the public record that he really did write nonsense, over and over. Second, I have shown from his writings that Major Douglas was not only not a Christian philosopher He openly opposed the moral legitimacy of the biblical idea of economic rewards and punishments. It was this underlying motivation, deeply religious in origin, which was the heart of Major Douglas’ writ- ings, not his various technical criticisms of capitalism. Third, I have shown, one by one, that Major Douglas’ spec- ific criticisms of the free market were either incorrect or were misdirected. As an example of one of his comparatively rare accurate but misdirected insights, he criticized fractional reserve banking. That is fine with me; this institutional arrangement deserves criticizing. The “Austrian School” economist Murray Rothbard has been saying so since at least 1963: and I have 4. Murray N. Rothbard, What Has Governrntw Done to Our Money? (Auburn, My Challenge to Social Credit Leaders 269 been saying so in print since at least 19735 (as Mr. Pinwill is well aware). Major Douglas criticized fractional reserve banking mainly for its supposed tendency to reduce the money (credit) supply when a business repays a loan. No such tendency exists. The opposite tendency exists, due to the bankers’ desire to make money. Under free banking, a profit-seeking bank will immediately loan out the money unless it is suffering from a bank run. In an economy in which the State has chartered a central bank, every bank will immediately lend out the money again, if only to buy government debt. So much for the techni- cal criticism which Major Douglas offered. It was incorrect. Douglas denied that his criticisms of capitalism were in any way moral criticisms. G But the main problem with fractional reserve banking is its immorality The moral defect of fractional reserve banking is its fraudulent issuing of warehouse receipts for which there is no cash or money metals in reserve. Bad morality produces evil results. The economic problem with fractional reserve banking is its creation of an economy’s boom- bust business cycle: the expansion of credits (fiduciary money), which produces a temporary lowering of short-term interest rates, followed by an economic boom, followed by a rise in interest rates, followed by a recession.’ Major Douglas’ suggested solution to fractional reserve banking was equally as inflationary and probably far more inflationary Central bankers at least want to make a personal profit for themselves, a profit denominated in money. They have an economic incentive to preserve the purchasing power of money. Major Douglas called for the creation of politically appointed monopolistic credit-masters who will have the legal Alabama: Ludwig von Mises Institute, [1963] 1990). 5. Gary North, An Introduction to Christian Economics (Nuttey New Jersey: Craig Press, 1973). 6. Prefisce, Crecht-Pouwr and Democracy. 7. Ludwig von Mises, Hsumzn Action: A Treat&e on Econmnics (New Haven, Con- necticut Yale University Press, 1949), ch. 20. 270 SALVATION THROUGH INFLATION authority to issue money without limit. I say “without limit” because the statistical device they would use to limit the issue of credit - the national accounting of total available capital - is itself affected by the issuing of credit. The monetary value, though not necessarily the real value, of a Social Credit nation’s capital will rise every time a new round of government-created fiat money is issued, thus requiring yet another issue of fiat money to keep the Just Price (business subsidies) and the Na- tional Dividend (consumer subsidies) in line with Real Credit (the total capacity - measured in money - of the economy to produce). Social Credit means State credit and inflation. Fourth, I have shown that Major Douglas did not under- stand that the rate of interest is an inescapable aspect of human decision-making and not merely the product of a money econo- my, let alone fractional reserve banking. It is an aspect of time. (Remember my Roll-Royce example: we all want delivery to- day.) Because he did not understand that the interest rate is a discount which we always apply in to the present value of fu- ture goods compared to the present value of present goods, he did not understand the structure of production - not just un- der capitalism but under every possible economic system. He therefore misunderstood the function of saving and investment - thrift. He was opposed to thrift, the basis of economic growth. Fifth, Major Douglas did not understand the source of pro- fits under capitalism, namely, the correct forecasting and accu- rate implementation of a plan of production to deliver consum- er goods in the fiture. He did not understand that profits come to one producer only at the expense of another producer, who did not see the economic opportunity underpriced factors of production. He did not understand that each producer’s profit motive is the consumers’ hammer which they hold over the heads of producers: “Do what we want, at a price we are willing to pay, or else you lose!” Sixth, I have shown that there is no break in the flow of funds under free market capitalism. In Appendix A, on Major My Challenge to Social Credit Leadem 271 Douglas’ A + B Theorem, I showed that this theorem had nothing to do with bank credit’s effect on the flow of funds. I also showed that the theorem was incorrect with respect to the flow of funds. Seventh, I have shown that profits under the free market are compatible with gradually falling prices as scarcity is steadily overcome. I therefore applaud falling prices that fall because of rising production and a relatively stable money supply. Falling prices under these conditions is the mark of man’s progressive overcoming of God’s curses in history. It is because I believe that it is beneficial for men to work toward the total abolition of the cursed aspects of scarcity, even though total abolition will occur only after the Final Judgment, that I applaud falling prices. Social Credit rejects falling prices. Finally, I have shown that Major Douglas was an anti-Semite. While some of his followers are aware of this, and no doubt have committed themselves to the Social Credit movement because of it, I think most of the Christians who are associated with Social Credit would not agree with Douglas on this point. I have done a great deal more than this, but this brief list should be sufficient. If I have in fact done what I have listed here, then Social Credit is revealed as fraudulent: wood, hay, and stubble. It deserves to be abandoned. I call upon you to abandon it publicly. You won’t, of course. Therefore. . . . What You Must NOW Do Those who have committed themselves to any cause for many years rarely abandon it. We see this in the case of Chris- tians who predict the return of Jesus to bring the Rapture on a certain date. These predictions are always proven wrong on the predicted day of the so-called secret Rapture.* Does this per- 8. Dwight Wkon, Armageddon Now! The Premillennial Res@nse to Russiu and Israel Siwe 1917 (TyIer, Texas: Institute for Christian Economics, [1977] 1991). Dr. Wilson i; premillennial. 272 SALVATION THROUGH INFLATION suade the former prophets to abandon their system of prophe- cy? Never! They just draw up new prophecy charts. Or their disciples do. I think it is the same with Social Credit. Thus, you have the following options in dealing with Salvation Though In.atwn: the silent treatment, the “water torture” strategy, the “North has misinterpreted Douglas” strategy, and the strategy of incoherence. The Silence Treatment You can pretend that I did not write this book. Say nothing. “North? Who’s North? Never heard of him.” Most of my critics over the years have taken this approach. A variation of this strategy is this: “I will not digni~ nonsense with a response.” But I don’t think you will adopt the silence strategy. Leaders of religious cults are incapable psychologically of remaining silent when someone attacks The Founder in a full-length book devoted to challenging The Founder. Neither will you remain silent. In fact, I think several of you will respond quite rapidly in your newsletters, perhaps even coordinating your responses just to keep your answers consistent. I think some of you will make it your life’s work to refute this book, month after month. If this book is correct, then anyone who has read it and does not agree with it must justify himself in public to his little band of disciples. So, you will have to respond. But are any of you intellectually capable of writing a whole book to refute my book? That is the question. More about this later. The Newsletter Virsion of the Water Torture This is the approach I think you will choose. Just keep reply- ing to me in one article after another: drip, drip, drip, until your readers have had enough. “No more! No more! We won’t believe North’s arguments any more. Just stop it!” The main problem with this approach is that I have written a book, not a newsletter article. If it becomes obvious to your My Challenge to Sociul Credit Leaden 273 followers that not one of you can answer me in an equally detailed book, keeping your arguments internally coherent, maintaining the cohesion of your entire reply, then your more sophisticated followers will catch on: you can’t answer me. Can one of you answer me? In a book? That is the question. “Douglas Did Not Really Mean This” I have filled my book with direct quotations from Major Douglas’ books. I have let him speak for himself. It will be difficult for you to persuade your readers that I have quoted him out of context, since I have quoted from all of his books to prove my case. Therefore, you will have to show that Douglas really did not mean what he wrote. That will be a very difficult task on your part. Also, you may wind up the way theological liberals have: abandoning the message of the Revealed Word by completely revising its meaning. “North Has Misinterpreted Douglas” This is probably your stiest approach. While it will not be easy, due to my continual word-for-word citations from Doug- las, perhaps you will be able to confuse at least some of your readers. After all, so few of them own all of Major Douglas’ books. They have not read them. Maybe you can show that two or three my interpretations of his words are incorrect, or are at least open to question, especially on some minor point or other. Then you can write something like this: “We see that North has completely misinterpreted Douglas and Social Credit.” You have this much going for you: Douglas’ language is so often confusing that your readers may not figure out that I have interpreted him correctly and you haven’t. I wonder, though, how you are going to deal with his con- tinual attacks on the Jews. That will take some doing. He was so clear on this point - just about the only topic he was clear about. 2’74 SALVATION THROUGH INFLATION Incoherence Will Distract the Troops This tactic has been basic to Social Credit ever since 1917. Social Credit is incoherent: inherently incoherent. Its more re. cent public defenders have matched the original incoherence of The Founder. They, too, are remarkably systematically inco- herent. They spin vast webs of verbiage to entrap their hapless followers. They recite Major Douglas’ slogans as if these were New Age mantras for meditation: “A plus B, A plus B, A plus B. . . .“ Or: “Effective demand, effective demand, effective demand. . . .“ The problem with this tactic is that my book is clear. It is clear because economic reasoning is clear. Social Credit is un- clear because it is not economics. My Public Challenge to All of You Here is my personal challenge: Gentlemen, you do not have a system of economic analysis which enables you to answer my criticivns. I will put it even more bluntly: Social Credit is not an economic system at all; it is a detailed psychological justification for re- treating from the moral battles of this world. Fact: whenever a Social Credit politician wins an election, he does nothing to implement Major Douglas’ proposed reforms. There is a very good reason for this: the original Social Credit system cannot be implemented because it is not a system of eco- nomics. Social Credit has for decades been a vote-getting slogan - a name without political content - for a few Canadian politi- cians, and a responsibility-avoidance scheme for the vast majori- ty of its professed disciples. Thus, Social Credit is not a national reform program; it is a psychological justification for remaining on the fringes of cul- ture: pointing the finger and calling others to leave the fight for systematic moral and social reform. Social Credit is an anti- reform movement disguised as a monetary and moral reform movement. It is a movement that plays at reform in order to My Challenge to Social Credit Leaders 275 escape the hard work of systematic organization and reform. It has no blueprint except the unworkable Scottish reform plan. If I am incorrect about the economics of Social Credit, one of you should be able to write a book to answer Salvation Through Inflation, line by line, argument by argument. But I warn you: you had better make certain in advance that your representative really does speak for your movement. I will write a book in response. If I can refute him, I thereby have refuted the rest of you. So, it would not be fair for the rest of you to come back with this lame response after my response appears: “Answering that book doesn’t count. Its author really doesn’t represent Social Credit.” I want to see a Foreword to your designated representative’s book: a signed statement from two leaders per nation - Eng- land, Canada, Australia, New Zealand, and South Africa - which affirms that his book constitutes your collective response to Salvation Through Inflation. If there is no signed Foreword testifying to your designation of the author’s position as the intellectual representative of Social Credit, I shall pay no atten- tion to the book. No one else should, either. If you cannot agree on what is wrong with Salvation Through Injlation, then Social Credit is not a developed economic system or movement. Here is my challenge to all of you: choose your representa- tive, identify publicly him as your representative in the book’s Foreword, and the two of us will then do intellectual combat. Please understand: my designated weapon is the book. I expect one of you to respond in a book, not just a series of highly selective newsletter articles written only to one’s flock. Let your followers see if one of you can handle my arguments. I don’t think any of you can. I now offer you an opportunity to prove me wrong. Will you accept my challenge? This enterprise will cost you no money. The Institute for Christian Economics will finance it. Just have your designated representative write a response to Salvation Through lnfiation, up to 150 double-spaced manuscript pages (Word Perfect 5.1 276 SALVATION THROUGH INFLATION defhult format or its equivalent). I will then write a reply no longer than 150 double-spaced pages. Then each of us will write a 50-page response to the other’s essay. Is one of you is willing to accept this challenge? Can he get ten of you to agree that he is your representative? I don’t care if all of you act as a committee to write the response, but put at least one person’s name on the manuscript. Someone should be made responsible. (I hope Mr. Pinwill will accept my challenge, and ten of you will agree to have him represent you. His book initiated this confrontation. He should now complete it.) If no one accepts my challenge, then all of you, not to men- tion your followers, should devote your lives to something other than Social Credit.’ If I do not receive a positive reply agreeing to this public debate by September 30, 1993, and the completed 150-page manuscript by December 31, 1993, then in 1994, I shall begin advertising Salvation Through In.ation as follows: The Devastating Attack on Social Credit Economics That No Social Credit Leader Has Been WWing or Able to Answer! Now, which of you will accept my challenge? Contact me ati Institute for Christian Economics Post Office Box 8000, Tyler, Texas, 75711, USA. One last reminder: should you fail to respond in detail, coherently, and in a book, then the best and the brightest of your followers will abandon Social Credit as a lost cause. They are awaiting your response. For that matter, so am 1. APPENDIX C A BIBLIOGIUPHY OF FIAT MONEY REFORMS The fiat money reform program developed by Major Doug- las was one of many such proposed reforms during the 1920’s and 1930’s. This had been preceded in the United States by the populist free silver and fiat money reform proposals of the post-Civil War era. In addition to such popular American works as W. H. “Coin” Harvey’s Coin’s Financial School and his other books, which sold in the millions during the presidential campaign of 1896. 1 The work of Alexander Del Mar deserves mention. Del Mar had been the Director of the U.S. Bureau of Statistics. He believed that the government should issue fiat money at a rate of 3.370 per annum,z a proposal which Milton Friedman has long echoed, beginning in the 1950’s. He wrote numerous books on the history of money including Money and Civilization (1886): The l+sto~ of Money in America (1899): and A Histo~ 1. See also W. H. Harvey The Remxdy (Mundus Publishing Co., 1915), and A Tak of Two Nations (1894), reprinted in 1931 by the Mundus Publishing Co., Monte Ne, Arkansas. 2. Del Mar, The Science of Money (New York: Macmillan, 1896), p. 200. 3. Reprinted by Omni Publications, 1975. 4. Reprinted by Omni, 1966. [...]... promoted by a Communist cleric? (38) What does the Bible say about wealth? (43) What does the Bible say about scarcity? (45) What does the Bible say about money? (47) Who are to be the State Credit Masters of Social Credit? (60) Did Major Douglas call for confiscation of property? (61-65) W o u l d Social Credit put most people on the dole? (65, 73, Is Social Credit socialistic? (75) Was Major Douglas a pragmatist... self-education I recommend reading these books in the order in which I present them Until those leaders who publicly defend Social Credit have replied in detail to these materials, the Social Credit movement will remain little more than the curious passtime of people who are not serious about either economic theory or economic reform At best, it will be a movemant composed of dedicated but totally self-deceived... listed these rulers; overwhelmingly they were q Jews.’ This was an extension of his 1935 book, The Mystical Body of Christ in the Modern WorZd In 1934 came Christopher Hollis’ book, The Breakdown of Money: An Historical Ex@znation.30 The author saw fit to cite favorably Ezra Pound’s Drafi of XXX Cantos praising the invention of paper by the Mongols (p 48) He called for State control over finance and the. .. revival of Christian faith (p 210) A 1936 pamphlet, Sociul Credit and Catholicism, was written by Georges Henri-Levesque He may be the only Ph.D in economics (if he really had one) who ever defended Social Credit An early example of the Destiny viewpoint is J Taylor Peddie, 77u Economic Mechanism of Scn$ture: The Cure for the Wort?d 8 Crisis (1934) * A later example is C F Parker’s little book, Moses the. .. Beard, one of the most influential liberal political scientists and historians in the United States In England, Frederick and Alfred Wigglesworth offered The Gold lizngle and the Way Out: Meaning and Causes of the Great Zndz@-ial Collapse, published in 1931, the year England went off the gold standard.1~ In the United States, Francis Townsend’s plan to create monthly money was reminiscent of Silveo... Sturted the World Cristi (1933) There was Frederick Soddy, who won the Nobel Prize in chemistry in 1921 His book, Wealth, Virtual Wealth and Debt (1926), was dedicated to Kitson Soddy’s work soon led to the creation of the Technocracy movement, an economic system described by Soddy in the second edition of his book as the new American doctrine of social and industrial salvation .“7 In 1921, the English... by the Covenant Publishing Co., London In 1962, Rev George S MacLeod wrote a foreword to Money: A Christtin View, the First Report of the Christian Doctrine of Wealth Committee of the Congregational Church of Scotland.s2 29 Fahay The Rulers of Russia (3rd cd.; Dublin: Regina Publications, 1967), pp 7-13 30 London: Sheed & Ward 31 London: WNiams & Norgate ’32 Glasgow: WNiam Maclellan 284 SALVATION THROUGH. .. Economic Slav~ or Freedom: Business De@ession.s Their Cause and Cure Andrae B Nordskog, the 1932 Vice Presidential nominee of the tiny Liberty Party, wrote a book in 1932: Spiking the Gold: or Who Caused the Depression and the Way Out 12 Also in 1932 came The Siegftied Plan, subtitled, FOT An Honest Exchange of Values b~ The Issue of A Sound Money, published by the Wigwam Press, Los Angeles Amazingly,... Ephesians Micah 6:11 Matthew 4:3-4 5:45 6:11 10: 28 12:36-38 17:27 20 :10- 15 25:201 25:24-27 50 81 43 82 214 21 48 178 42 141 2:8-9 2:8 -10 2 :10 4:14 x 46 x 32 II Thessalonians 101 , 145 3 :10 3 :10- 14 212 I Timothy 6 :10 47 James Mark 2:27 13:5 210 ix Luke 12:47-48 78-79,142 Remans 5:8 6:23 46 46 I Corinthians xx 3:12 2:20 2:24 4:1 4:17 x x 143,241 241 I John 1:9 4:1 47 17 Revelation 13:16-17 106 Aberhart, William,... founded what has become known as the Christian Reconstruction movement, also known as theonomy He is the author of approximately 35 books in the fields of economics, history, and theology His first book, Marx’s Religion of Revolution, appeared in 1968 His Introduction to Christian Economics appeared in 1973, the year he began writing a multivolume economic commentary on the Bible, which now covers Genesis, . some of his followers are aware of this, and no doubt have committed themselves to the Social Credit movement because of it, I think most of the Christians who are associated with Social Credit. collective response to Salvation Through Inflation. If there is no signed Foreword testifying to your designation of the author’s position as the intellectual representative of Social Credit, I shall. his other books, which sold in the millions during the presidential campaign of 1896. 1 The work of Alexander Del Mar deserves mention. Del Mar had been the Director of the U.S. Bureau of Statistics.